Based on the information in question $2,$ what is the journal entry for the payment of

$$35,000$ interest on $\frac{12}{31}\frac{?}{2020}?$

Interest expense

$35,000$

Cash

Notes payable

$35,000$

Loss from debt restructuring

Cash

Interest payable

$35,000$

Cash

Cash

$35,000$

Question $4$

On March $1,2018,$ Brown Corporation issued $8\%$ bonds dated February $1,2018,$ the

face amount of $$500,000.$ The bonds were sold for the present value of the bonds on March

$1,2018$ plus one$-$month accrued interest. The bonds mature on January $31,2023.$ Interest is

paid semiannually on July $31$ and January $31.$ Brown's fiscal year ends on December $31$ each

year. The effective interest rate is $10\%.$

What is the appropriate discount rate used to derive the present value of the bonds on

March $1,2018?$

$5\%$

$4\%$

$10\%$

$8\%$